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DOMINO'S TURNAROUND MASTER EXITS SHEEHAN LEAVES PIZZA CHAIN AFTER BATTLE OVER YEAREND BONUS

By Published on .

Just when Domino's Pizza was ready to deliver sizzling 1993 results, the architect of its turnaround stalked out in a dispute with mercurial owner Tom Monaghan.

Ending an impressive 16-month reign as VP-marketing and product development at Domino's, Larry Sheehan suddenly quit last week after he and the company president couldn't agree on Mr. Sheehan's yearend bonus.

Mr. Sheehan, whose marketing directives were key to Domino's 1993 turnaround, said he felt the bonus he received did not reflect his contributions. He wouldn't give a specific number but said the bonus he requested was less than $500,000.

The bonus dispute occurred af-ter it was clear the privately held company would probably rack up the highest profit level in its 32-year history, according to Mr. Sheehan.

Profits in the fiscal year endedDec. 31, which topped those during its heyday in the mid-1980s, came after two years of losses-about $55 million in 1991 and around $68 million in 1992, according to Crain's Detroit Business. The losses in both 1991 and 1992 were due mainly to one-time, non-cash charges related to the sale of various assets.

Systemwide sales at the 5,300-unit chain remained flat in 1993 at $2.3 billion, according to a company spokesman. Sales in 1991 were $2.4 billion.

Despite the bonus disagreement, Mr. Sheehan said he left on good terms.

"Larry certainly will be missed," Mr. Monaghan said in a statement. "He made an impact on the company that will be felt for years."

Mr. Sheehan, 61, leaves at a crucial juncture for Domino's, now trying to reinvent the chain's niche without its signature 30-minute guarantee. Adding to the void is the October departure of Chief Operating Officer, Lawrence Gordon, 70, who left after just a year.

Mr. Monaghan, 56, reluctantly retired the guarantee last month after the company lost a $79 million lawsuit to a Missouri woman injured in an accident with a Domino's delivery driver.

The new guarantee-satisfaction or a new pizza or a refund-already appears in a national commercial and is being added to all Domino's printed materials. Though Mr. Sheehan believes the guarantee gives Domino's a stronger marketing platform, others like Ron Paul, a restaurant analyst with Technomic, Chicago, don't agree.

"To many customers [the 30-minute guarantee] is not that important, but it's what Domino's is noted for," Mr. Paul said.

Domino's cut ad spending in 1991 and 1992, spending $75 million in '91 and then only $60.6 million in '92, down 19.2%, according to Competitive Media Reporting. For the first nine months of 1993, spending was $44.2 million. Mr. Sheehan said that though corporate spending fell below 1992 levels in that period, local co-ops spent more.

Plans this year call for in creased ad spending, Mr. Sheehan added.

According to Canton, Mich.- based pizza consultant John Correll, Mr. Sheehan was the first execu tive to convince Mr. Monaghan to deviate from Domino's four principles: serv ing only pizza; offering free de livery and no carryout dis counts; building no inside seat ing; and deliv ering pizza within 30 minutes.

Mr. Sheehan expanded the menu and offered the same two-for-one deals he created during his 10 years at Little Caesars, where he coined the "Pizza!Pizza!" concept.

In early 1993, Mr. Sheehan jump-started Domino's "Somethin' for nothin'|" campaign, created by Grey Advertising, New York. That effort enabled Domino's to move from price discounts to value-added promotions.

He also introduced Twisty Bread, submarine sandwiches, thin-crust pizza, salads and the Dominator, a 10-by-30-inch pizza that Domino's is rolling out regionally.

Mr. Sheehan will work for Domino's as a consultant until the chain finds a new marketing director. He is returning full time to his own business, Sheehan Enterprises, which runs three restaurants and a number of real estate ventures.

Asked whether he might resurface at Little Caesars or Pizza Hut, Mr. Sheehan laughed and said: "One more pizza company, and I can score a hat trick."M

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